BELLEVUE, WA – April 30, 2015 – Expedia, Inc. (NASDAQ: EXPE) today announced financial results for the first quarter ended March 31, 2015.
• Room night growth accelerated to 32% year-over-year, with domestic and international room nights growing 23% and 41% year-over-year, respectively.
• Gross bookings increased 19% and revenue increased 14% year-over-year. Excluding the impact of foreign exchange, gross bookings increased 25% and revenue increased 23% year-over-year.
• Strong performance in the Core Online Travel Companies (“Core OTA”) business drove growth in Expedia® (excluding eLong™) Adjusted EBITDA(1) of 25% year-over-year. Consolidated (including eLong) Adjusted EBITDA(1) declined 5% year-over-year.
• Strong performance in the Advertising & Media business continued, delivering over $500M in net revenue on a trailing twelve months basis, an increase of 35% year-over-year, driven by growth in trivago and Expedia Media Solutions.
• Expedia (excluding eLong) added approximately 14,000 properties to its global supply portfolio during the first quarter of 2015, more than double the pace of acquisition in the fourth quarter of 2014.
• The company substantially completed the migration of the Wotif.com® website to the Expedia platform.
• In February 2015, Expedia, Inc. announced it has entered into a definitive agreement to acquire Orbitz Worldwide, Inc., including all of its brands.
Gross Bookings & Revenue
Total gross bookings increased 19% (25% excluding foreign exchange) in the first quarter of 2015, driven by growth in the Core OTA business, including strong performance at Brand Expedia and Hotels.com. Acquisitions added approximately 3 percentage points of inorganic bookings growth for the quarter.
Domestic gross bookings increased 20% and international gross bookings increased 17% (32% excluding foreign exchange). International bookings totaled $6.1 billion, accounting for 41% of worldwide bookings, consistent with the first quarter of 2014. Expedia (excluding eLong) gross bookings increased 18% in the first quarter of 2015, compared to the first quarter of 2014.
Total revenue increased 14% (23% excluding foreign exchange) in the first quarter of 2015, driven primarily by the Core OTA business, including strong performance at Brand Expedia and Hotels.com, as well as trivago. Acquisitions added approximately 3 percentage points of inorganic revenue growth for the quarter.
Domestic revenue increased 20% and international revenue increased 8% (26% excluding foreign exchange). International revenue equaled $605 million, representing 44% of worldwide revenue, compared to 47% in the first quarter of 2014. Expedia (excluding eLong) revenue increased 15% in the first quarter of 2015, compared to the first quarter of 2014.
Product & Services Detail
As a percentage of total worldwide revenue in the first quarter of 2015, hotel accounted for 66%, air accounted for 10%, advertising and media accounted for 9% and all other revenues accounted for the remaining 15%.
Hotel revenue increased 14% in the first quarter of 2015 on a 32% increase in room nights stayed driven by Hotels.com, eLong, Brand Expedia and Wotif Group, partially offset by a 14% decrease in revenue per room night. Revenue per room night decreased primarily due to an unfavorable foreign exchange impact, both in translation and in book-to-stay, promotional activities such as growing loyalty programs, as well as the efforts to expand the size and availability of the global hotel supply portfolio. Revenue per room night is expected to continue to decrease in 2015. Average daily room rates (“ADRs”) decreased 2% year-over-year in the first quarter of 2015, as currency-neutral ADR growth was offset by an unfavorable foreign exchange translation impact. ADRs are expected to be negative year-over-year in 2015 primarily due to foreign exchange.
Air revenue increased 9% in the first quarter of 2015 due to an 18% increase in air tickets sold, partially offset by a 7% decrease in revenue per ticket. Advertising and media revenue increased 23% in the first quarter of 2015 due to continued strong growth in trivago and Expedia® Media Solutions. All other revenue increased 13% in the fourth quarter of 2014 primarily on growth in travel insurance and car rental products.
Recent Highlights
Global Presence
• Expedia, Inc. entered into an agreement with AirAsia Berhad to purchase an additional 25% equity interest of AAE Travel Pte. Ltd., resulting in a 75% ownership stake in the company.
• Expedia, Inc. announced it has expanded its partnerships with Decolar.com and Despegar.com branded websites to include deeper cooperation on hotel supply and a $270 million cost method investment by Expedia.
• Expedia, Inc. announced in April that it plans to move its global headquarters to the City of Seattle by 2018 after purchasing a multi-building, waterfront campus for $228.9 million. The acquisition closed on April 30, 2015.
Supply Portfolio
• At quarter-end, Expedia, Inc. global websites featured approximately 510,000 properties, including over 280,000 in China through eLong.
• In February, Expedia, Inc. announced it has entered into a definitive agreement under which it will acquire Orbitz Worldwide, Inc., including all of Orbitz Worldwide's brands, for $12.00 per share in cash, representing an enterprise value of approximately $1.6 billion.
• Expedia, Inc. entered into commercial agreements with a number of airlines, including Etihad Airways, Spirit Airlines, Southern Airways Express and OneJet, Inc., and also third-party package provider Sunwing Vacations Inc.
• Brand Expedia, Egencia, CarRentals.com and Hotwire signed multi-year deals with Avis Budget Group covering their Avis, Budget, Payless and Apex brands for the Americas and APAC points of sale.
• Hotels.com is the first OTA to partner with loyalty program Fly Buys, which will allow New Zealand customers to earn Fly Buys points on global hotel bookings.
• Expedia Lodging Partner Services and Innlink LLC, a member of the IHS Group, entered into an agreement to facilitate making Innlink’s hotels available via Expedia’s global portfolio of brands.
• Expedia Affiliate Network (EAN) signed agreements to power online hotel bookings for several international companies, including American Airlines.
• Brand Expedia’s cruise business set records for gross bookings and transactions during Q1 Wave Season for the second year in a row. Expedia CruiseShipCenters saw more consumer and franchise interest than ever before during Q1 with a 54% increase in web leads and a 91% increase in franchise inquiries over Q1 2014.
• Egencia expanded its global presence to Vietnam through its alliance with one of Vietnam’s largest travel management companies, Hong Ngoc Ha in Ho Chi Minh City. Egencia now operates in 65 countries with 42 partners worldwide.
• Hotels.com has over 133,000 eligible hotels where its loyalty program members can redeem Hotels.com® Rewards nights. The program has over 15 million members who have redeemed over 3 million nights since its inception.
Technology Innovation
• Expedia, Inc. brands continue to match the pace of innovation in the industry, as demonstrated recently by Brand Expedia, Hotels.com, and Hotwire each releasing an app for Apple Watch™.
• Egencia’s TripNavigator for iPad launched with features such as personalized search options and mobile–only deals. Egencia experienced a nearly 300% increase in unique users logging into the Egencia app family in March.
• Brand Expedia and Hotwire launched new car rental products on their mobile apps. Brand Expedia US customers can now rent cars via mobile phone, and Hotwire now offers traveler protection policies for car bookings on Android and iOS.
• The company substantially completed the migration of Wotif.com website to the Expedia platform. Wotif.com now offers Expedia’s range of directly contracted global properties, expanding hotel choices for Wotif.com consumers.
• Expedia, Inc. globally launched Sell Tonight for hotels, a new feature within Expedia Partner Central that allows hotel suppliers to adjust their room pricing strategy to offer competitive last minute pricing and better manage their inventory.
Distribution Channels
• Expedia Media Solutions announced the recipients of its 2014 EMEA Partner Awards for original and groundbreaking campaigns that exemplify innovation and success in digital marketing and advertising across regions. Winning partners included Meliá Hotels International, Lufthansa, Greek National Tourist Organization, Dubai Corporation of Tourism & Commerce Marketing with Emirates Airline and Hilton Worldwide.
• Engagement Labs named Hotels.com’s US Twitter handle the highest ranking Twitter handle in the Travel Aggregator category.
• Hotwire won EyeForTravel’s Mobile Innovation Award for “Best Mobile Travel User Experience” and was recognized on their site.
